Sponsored Links

Sergio Marchionne Admits Underestimating EVs In China Was A ‘Mistake’

Sponsored Links

In an interview with Just Auto at the 2018 Geneva Motor Show this month, Fiat Chrysler Automobiles CEO Sergio Marchionne admitted that underestimating the importance of so-called “new-energy vehicles” (NEVs) in China – plug-in hybrids and battery-electric vehicles – was a mistake. China has thrown a lot of support behind new-energy vehicles as a means of combating air pollution and carbon emissions while reducing its dependence on foreign oil. The government offers incentives to consumers and transit networks to encourage NEV purchases, and has set aggressive quotas for automakers with regard to NEV sales.

“In China… we have made a number of mistakes in the past and underestimating new energy vehicles in the market has been one,” Marchionne told Just Auto. “We are looking at that.”

Granted, it isn’t just in the Chinese market that Fiat Chrysler has been apprehensive to embrace electrification; at Detroit’s North American International Auto Show earlier in the year, Sergio Marchionne suggested to reporters that sizable investments and ambitious targets with regard to electrification and autonomy aren’t pragmatic. He said that the automaker would remain “technology neutral.”

“I don’t know of a [carmaker] that is making money selling electric vehicles unless you are selling them at the very, very high end of the spectrum,” he said at a press conference. “Whenever we end up going to auto shows, the intensity with which we make these proclamations [about EVs and autonomy] goes up exponentially.”

But in markets like China, where the government is enforcing a certain rate of adoption, FCA doesn’t have the luxury of staying “technology neutral” – not if it hopes to keep selling vehicles there. What’s more, the national narrative around NEVs, generous incentives offered by the federal government, and willingness of Chinese automakers to embrace electrification have helped create considerable demand in the country; the country has the world’s largest share of new-energy vehicles, with more than 1.7 million sold there through December, 2017.